Q4 2024 HUYA Inc Earnings Call
Music
Q-24, Earning Flavinar. Q-24, Earning Flavinar.
I'm Hanyu Liu from the Huya Investor Relations. At this time, all participants are in lesser only mode. Please be advised that today's webinar is being recorded.
The company's financial and operational results were issued earlier today and are posted online.
You can also view the earnings press release by visiting the IR website at ire.huya.com
Speaker Change: A replay of the call will be available on the I.R. website soon. Participants of management on today's call will be Mr. Junhong Huang, our acting co-CEO and Senior Vice President, and Mr.
Speaker Change: Our acting, co-CEO and CFO , management will begin with the prepared remarks and the call will conclude with a Q&A session.
Speaker Change: Before we continue, please note that today's discussion will contain forward-looking statements.
Speaker Change: made on the same horrible provisions of the U.S. Private Security's litigation reform act of 1995.
co-alloking statements involve inherent risks and uncertainties.
Speaker Change: As such, the company's results may be materially different from the views expressed today.
Speaker Change: Further information regarding this and other risks and uncertainties is included in the company's prospectus and other public filings as filed with the U.S. Securities and Exchange Commission. The company does not assume any obligation to update any forward-looking statements.
as except as required of the applicable law.
Speaker Change: Please also note that OUYA's earnings press release and this conference call include discussion of audited
Speaker Change: Gap financial information as well as unaudited non-gap financial measures. We ask press release contains a reconciliation of the unaudited non-gap measures to the unaudited most directly comparable gap measures.
Speaker Change: With that, I'm pleased to turn the call over to our co-CEO and SVP, Mr. Huang. Please go ahead.
Huang: Okay, hello everyone. Thank you for joining our earning conference today.
Huang: Despite 2024's external challenges, we delivered a solid year by seizing opportunities arising from our strategic transformation and new game launches.
Huang: Notably, revenues from the game-related services, advertising, and other segments increased by 145.4% year-over-year to RMB 1.33 billion for the full year.
Huang: This segment accounted for 21.9% of our total net revenues for the year, a substantial rise from 7.8% in the previous year. We recorded total net revenues of RMB
6.08 billion for the full year with improving profitability.
Huang: Non-GAAP net income reached RMB 269 million, up by 125.6% year-over-year, with net cash provided by operating activities turning positive at RMB 94 million.
Thank you for watching!
Huang: These advancements are thanks largely to our strategic commercialization model update, as well as
Huang: our enhanced live streaming content ecology and technology and product upgrades. Now, let me share the detail of our recent business progress.
Huang: First, we make encouraging strides in our business transformation. For the fourth quarter, revenues from game-related services, advertising, and others increased by 99.4% year-over-year to RMB 372 million.
Huang: Despite a sequential revenue decline from the third quarter peak due to the game industry's seasonality, this sector's overall performance remains solid.
Huang: Regarding game distribution, we continue to increase operational excellence for both new and existing titles and are pleased to see the Huya platform emerging as one of the primary distribution channels for several games.
Huang: Following the recent launch of DataForce, we actively encourage our broadcasters' participation in the Tidal's live streaming and game promotion.
Huang: This led to rapid growth in grass-rich sheep for the game generated
Huang: through the VR distribution channel while also boosting its live streaming content performance.
In addition,
Huang: We plan to collaborate with more game developers and publishers on distribution and joint operations, and we conducted some meaningful trials with third-party game studios in the fourth quarter.
Huang: We look forward to these initiatives contributing to the future development of our game distribution business.
Huang: For in-game item sales, we deepen our focus on diversifying in-game item categories and improving traffic efficiency on live channels.
Huang: We also upgraded the More section on our app, integrating popular game skins, tools, and user incentive activities.
Huang: In January, we launched our first League of Legends Steam Game Item Shop.
accompanied by a special spring festival promotion featuring
Huang: who are exclusive benefits. Excitingly, our efforts drove a record high in our monthly total in-game item sales GMV for January.
Huang: Only advertising front, it is worth noting that our in-house LOL Legend Cup Season 2
double its sponsorship revenue compared to its inaugural event.
Huang: leveraging Legend Cups increased influence and IP value. The event attracted a wider range of well-known sponsors from the beverage, automotive and local service sectors.
Huang: Furthermore, we began leveraging our international business presence to explore diverse revenue streams in the overseas market in 2024 by providing game distribution, in-game item sales, and game marketing services.
These initiatives have already achieved promising results.
Huang: Moving on live streaming content ecology, we continue to strengthen our content ecology through collaborations with various content platforms during the quarter.
Huang: This has brought our broadcaster's quality content and services to a broader game audience, expanding our market presence and setting the stage for future commercialization initiatives.
Huang: In December 2024, we as content reached a record high number of viewers, which we estimated to be more than double the number of our mobile active users.
Huang: On our professional content enrichment efforts, our comprehensive coverage strengthen users' inclination to watch eSports on VR platform, enhancing our market share of several major events.
Huang: Our licensed tournaments covered approximately 40 game titles in 2024. In the fourth quarter alone, we broadcast over 100 licensed esports tournaments.
Featuring major events such as League of Legends
Speaker Change: Wu's 2024 and Demacia Cup Honor of Kings KPL Grand Finals.
Speaker Change: and Counter-Strike 2's Shanghai Major and Blast Premier World Final, solidifying our content advantage.
Speaker Change: We also broadcast over 35 self-organized esports tournament and entertainment PGC shows during the fourth quarter. Among these events LOL's Legend Cup S2, HOK's Super Platform Cup, and Valorant's Wall-E Cup were quite popular.
Speaker Change: In addition, we hosted Xiangwang Cup and Huya Jiangsu Village Games for HOK and Close Fire competitions in the fourth quarter, attracting widespread participation from local communities.
Speaker Change: Furthermore, this year we continue to develop our self-organized tournaments to complement the licensed tournaments on our platform and provide our users with a steady stream of fresh content.
Speaker Change: In doing so, we reduced the gap between our major licensed tournaments and in-house produced content for both League of Legends and Honor of Kings significantly.
Speaker Change: from over one month in 2023 to no longer than two weeks in 2024.
Speaker Change: We also enhance the influence of our in-house produced content by engaging more popular broadcasters and fostering greater interactions in our game community.
Thank you for watching!
Speaker Change: We are currently leading the industry in the number of top-tier in-house produced e-sports events and audience scale.
according to our internal statistics.
Speaker Change: and as teammates, we captured over half of the market share for the industry's top tier in-house produced eSports events in 2024.
Speaker Change: In particular, our flagship Legend Cup H2 has set a new standard for premier self-organized tournaments across various platforms.
building on the success of
Speaker Change: In its inaugural season, we boosted the event viewing and entertainment value this year with upgraded team formation rules, match scheduling and gameplay design, as well as international players' participation.
Thank you for watching!
increase in the events derivative
Speaker Change: content and sponsorship revenue clearly reflect Legend Cup's rising IP value. We are also delighted to see that the viewer
Speaker Change: shape metrics of the Legend Cup Series on our platform nearly equal or even surpassed those of some top-tier licensed esports events.
In 2025, we intend to replicate our successful.
Speaker Change: They organized a tournament model to encompass a wider array of popular eSports titles on our platform.
Speaker Change: Alongside the upcoming Legend Cup Season 3, which will begin at the end of March, we will also launch premier VR-branded tournaments for Dota 2 and Battle Range, creating more high-quality IPs.
We invited everyone to stay tuned for this exciting event.
Turning now to our technology and
Speaker Change: To further enhance WeAreEsports community vibe, we launched a series of product features on our app around tournaments to increase viewers' engagement and facilitate access to professional esports analysis.
Speaker Change: During the Marcia Cup, we introduced customizable team sim live channel schemes and bullet chat effects, as well as pre-match analysis and real-time data based on event statistics.
Speaker Change: Additionally, we developed features that allow viewers to access in-team chats during matches and flex.
Speaker Change: Thirdly, switch between the first-person perspective of different players which will gradually be integrated with our content release to provide inclusive content for team fans.
Speaker Change: We also launched a VR rating section on our platform, providing users with a professional forum for eSport rating and reviews of eSport players, tournaments, broadcasters and more.
Speaker Change: This section has quickly gained recognition and active participation from users.
For instance,
Speaker Change: By the end of the event in early March, this year's LPL split one.
has received 6.8 million total of user ratings.
Speaker Change: representing an increase of approximately 80% compared to the cumulative rating of last year's LPL summer split.
Speaker Change: and more than double that of the event on another well-known rating platform during the same period.
Speaker Change: This not only reflects high user engagement with VR ratings, but also demonstrates its significant impact on our promoting interaction with the eSports community.
Speaker Change: Furthermore, we are actively embracing cutting-edge technologies such as AI. In February, we became the first game live-streaming platform to fully deploy the DeepSeek R1 model. As deployed an AI assistant,
Speaker Change: ...feature to help users efficiently search for game strategies and live channels of interest.
Speaker Change: We will further advance our AI plus live streaming strategy by applying AI large models to improve broadcasters' content creation efficiency through smart interaction upgrades.
for process automation and data-driven operational support.
Speaker Change: This will also foster AI-powered digital IP innovation and facilitate the design of more distinctive visual streamers and delivering a novel experience for both users and content creators.
By leveraging AI technologies throughout the entire cycle of
Speaker Change: live-streaming content production, distribution, and consumption. We expect to energize the live-streaming creators' ecosystem with intelligent tools, preparing the human-driven live-streaming industry towards a...
technology-driven future.
Speaker Change: We believe this innovative, AI-driven endeavors will create more immersive, interactive experiences for users and generate long-term value for Wuya in live streaming, eSports and more areas.
building on the meaningful achievement
We will continue to progress our
although challenges and uncertainties exist.
Speaker Change: We remain committed to building a more comprehensive game content and services.
Speaker Change: platform, exploring new technologies and deepening their applications to holistically improve our content creators and user experience.
Speaker Change: Moving into 2025, we will continue to respond pragmatically to changes in the market environment and capitalized on market opportunities, driving our long-term sustainable business development.
Speaker Change: With that, I will now turn the call over to our acting co-CEO and CFO, Raymond Lei. He will share more detail on our results. Raymond, please go ahead. Thank you, Vincent. And hello, everyone.
Raymond Lei: I'll start with our 4th quarter results, followed by our full year financial highlights and an update on our shareholder returns.
Raymond Lei: Our total net revenues in the first quarter of 2024 were approximately RMB 1.5 billion, with game-related services, advertising, and other businesses nearly doubling their revenues year-over-year.
Raymond Lei: largely offsetting the macroeconomic and the industry environment's continued impact on live streaming revenues.
Raymond Lei: The number of paying users in the fourth quarter rose year-over-year to 4.5 million, excluding those who made in-game purchases through our game distribution business but didn't pay via our platform or related services.
demonstrating engagement across our core user base.
Raymond Lei: Due to the seasonal nature of major esports events scheduling and the related cost allocation,
Raymond Lei: We have faced a growth margin pressure in the fourth quarter in recent years.
Raymond Lei: Nevertheless, in 2024, we further rationalized broadcaster-related and eSports content costs, including costs related to LOL worth, resulting in an increase in our fourth quarter gross margin to $3.5 billion.
Raymond Lei: 11.4% from 1% in the same period last year. Moreover, enhanced operation efficiencies resulted in a 23.8% year-over-year reduction in total operating expenses.
further contributing to the improvement in our broad profit.
Profit Metrics.
Raymond Lei: We achieved a non-gap net income of RMB 1.2 million in the quarter, marking a turnaround from the same period last year.
Raymond Lei: We record non-gap net profit in all four quarters of 2024, highlighting significant progress in our business optimization efforts.
Raymond Lei: Let's move on to more details of our Q4 financial results.
Raymond Lei: Our total net revenues were RMB 1.5 billion for Q4, of which live streaming revenues were RMB 1.12 billion.
Raymond Lei: and game-related services, advertising and other revenues were RMB 372 million, compared with total net revenues of RMB 1.53 billion for the same period last year.
Raymond Lei: Cost of revenues decreased by 12% year-over-year to RMB 1.33 billion for Q4, primarily due to decreased revenue sharing fees and the content cost.
SAS, as well as bandwidth and server custody fees.
Raymond Lei: Revenue sharing fees and the content cost decreased by 12% year-over-year to RMB 1.16 billion for Q4.
Raymond Lei: primarily due to decreased live streaming revenue sharing fees associated with that decline in live streaming revenues.
Raymond Lei: as well as lower costs related to licensed eSports content and in-house produced content, partially offset by the increased game-related services.
Raymond Lei: Advertising and other revenue sharing fees. Benefits and survey cast data fees decreased by 33% year-over-year to RMB55 million for Q4.
Raymond Lei: primarily due to continued technology and management enhancement efforts as well as favorable pricing terms.
Raymond Lei: Gross profit was RMB 170 million for Q4 compared with RMB 15 million for the same period last year. Gross margin was 11.4% for Q4 compared with 1% for the same period last year.
Raymond Lei: primarily attributable to decreased revenue-sharing fees and the content cost as a percentage of total net revenues.
Raymond Lei: Excluding share-based compensation expenses, non-gap gross profit was RMB174 million, and the non-gap gross margin was 11.6% for Q4.
Raymond Lei: Research and development expenses decreased by 10% year-over-year to RMB123 million for Q4, primarily due to decreased personal related expenses, partially offset by higher share-based compensation expenses.
Raymond Lei: Sales and marketing expenses decreased by 45% year-over-year to RMB63 million for Q4.
Raymond Lei: primarily due to decreased marketing and the promotion fees as well as personal related expenses.
General and administrative expenses decreased by 90%.
Raymond Lei: Year-over-year to RMB81 million for Q4, primarily due to decreased provision and office expenses, partially offset by higher share-based compensation expenses.
Raymond Lei: Other income was RMB4 million for Q4 compared with RMB13 million for the same period last year, primarily due to lower government subsidies.
Raymond Lei: As a result, operating loss was Rb93 million for Q4 compared with the loss of Rb322 million for the same period last year.
Raymond Lei: Executing share-based compensation expenses and the allocation of intangible assets for business acquisitions like gap or trade loss was the R&D 69 medium for Q4.
Raymond Lei: Compared with the loss of RMB316 million for the same period last year, Long gap operating margin was negative 4.6% for Q4.
CoachingBadminton.com Lee Jae Bok
Speaker Change: Interest income was RMB$75 million for 2004 compared with RMB$129 million for the same period last year.
Raymond Lei: primarily due to a lower time deposit balance, which was primarily attributable to the special cash dividend paid in May and October 2024.
Raymond Lei: The PEB loss of investments was Rb 151 million for Q4, compared with Rb 8 million for the same period last year.
Raymond Lei: As we recognize, impaired charges are our investment attributable to the weak financial performance of certain investees.
Raymond Lei: That loss attributable to Hu Yaying was Rb 172 billion for Q4, compared with a loss of Rb 275 billion for the same period last year.
Raymond Lei: Excluding share-based compensation expenses, impairment loss of investment, and arbitration of financial assets from business acquisitions.
that of Yicup Tess'
Raymond Lei: The gap net income attributable to Huya Inc. was Rb1 million for Q4, compared with the gap net loss attributable to Huya Inc. of Rb190 million for the same period last year.
The gap net margin was 0.1% for Q4.
and many more. Thank you. Bye bye.
Raymond Lei: Diluted lead loss per ADS was RB 0.75 for Q4. Lung gap diluted lead e-cap per ADS was RB 0.01 for Q4.
As of December 31, 2024, the company has
Raymond Lei: Cash and cash equivalents, short-term deposit and long-term deposit of RMB 6.73 billion compared with RMB 8.08 billion as of September 30, 2024.
Moving on to our full year 2024 results.
Raymond Lei: Total net revenues were Rb6.08 billion for 2024 compared with Rb6.99 billion for the prior year.
Raymond Lei: Live streaming revenues were RMB 4.75 billion for 2024 compared with RMB 6.45 billion for the prior year.
Raymond Lei: Game related services, advertising and other revenues were Rb 1.33 billion for 2024 compared with Rb 544 billion for the prior year.
like get cross-court with RB8.
125 million for 2024
Raymond Lei: Compared with R&D 831 for the prior year, land gap gross margin was 30.6% for 2024, up from 11.9% for the prior year.
Raymond Lei: The gap net income attributable to Huya Inc. was RMB 269 million for 2024, up from RMB 119 million.
Raymond Lei: $190 million for the prior year, and the gap net budget was 4.4% for 2024, up from 1.7% for the prior year.
Raymond Lei: Now, Gap Diluted Lead Income per ADS was Rb1.15 for 2024, up from Rfb1.15 for 2024.
0.48 for the prior year
Raymond Lei: Net cash provided by operating activities was RMB 94 million for 2024 compared with net cash used in operating activities of RMB 32 million for the prior year.
for additional details.
Raymond Lei: On our full year 2024 financial results, I encourage listeners to refer to our earliest press release issued earlier today.
Finally, let me provide an update on our shareholder returns.
To enhance our shareholder returns and optimize our capital structure.
Raymond Lei: We are pleased to introduce our 2025-2027 dividend plan which is expected to distribute a total of no less than US$400 million to our shareholders over the next three years.
Raymond Lei: Specifically, for 2025, we have declared a cash dividend of US$1.47 per AUD or per ADS.
Totally approximately US$340 billion
Raymond Lei: For 2026 and 2027, we expect to distribute no less than U.S. $30 million in cash dividends annually. In addition,
Raymond Lei: through our Up to U.S. Dollar 100 Million Share Repurchase Program.
Raymond Lei: We had repurchased 90.1 million Huya shares with a total aggregate consideration of US$63.6 million as of the end of December 2024.
Speaker Change: Huya's Board of Directors has also authorized the renewal and continued usage of the unutilized quota under the City Share Repatriation Program until March 31, 2026.
Raymond Lei: With that, I'd like to open the call to your questions.
Speaker Change: Thank you, Raymond, and hello everyone. If you are dialing in by phone, please press 5 to ask a question, then press 6 to unmute yourself.
Raymond Lei: If you are accessing the call from Centric Meeting or VoteMeeting application, please click the raise hand button at the bottom left.
Speaker Change: For the benefit of all participants on today's call, if you wish to ask your question to management in Chinese, please immediately repeat your question in English.
and Hanyu Liu.
Today's first question comes from Thomas Chung from Jeffries.
Your line is open. Please go ahead.
Thomas Chung: Thank you Director Chen for accepting my question. My question is about shareholder returns. I would like to ask what considerations the company has for developing shareholder return strategies.
Speaker Change: So I translate myself and thanks management for taking my question. My question is about shareholder return strategy. So what factors do we consider when we make shareholder return strategy? Thanks.
Thomas Chung: Thank you, Thomas. We focus on boosting shareholding returns and have set up a stock market plan for 2025-2027.
Speaker Change: The plan is to issue a total of no less than $400 million in cash shares in the three-year period. In 2025, the amount will be about $3.4 billion, or $1.47 per ADS.
Speaker Change: The expected stock price for 2026 and 2027 is not less than 30 million US dollars per year.
Speaker Change: This stock plan aims to further respond to Huya's shareholders and optimize the company's capital structure to improve the efficiency of cash use.
Speaker Change: We place great emphasis on enhancing shareholder returns and have thus established a 2025-2027 dividend plan which aims to distribute a total of no less than 400 million US dollars in cash dividends to Huya's shareholders over the next three years.
Speaker Change: For 2026 and 2027, we expect to distribute no less than US$30 million in cash dividends annually.
Speaker Change: This dividend plan is designed to further reward who we are shareholders and optimize the company's capital structure and improve the efficiency of our cash utilization.
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Speaker Change: Wu has a lot of capital, and by the end of December, 2024, the company has a total value of more than US$900 million in cash and other assets.
并且公司没有借债 2024年全年,我们的Langeb金融润脚2023年有较大幅度提升达到2.7亿元 并且已经实现全年经营现金流转正
Speaker Change: Without considering the follow-up business cash situation, under this three-year stock market plan, after completing all the stock market payments, Huya still retains a value of about $500 million, which can guarantee the support of future business development.
Speaker Change: Given that Huya is currently in a special stage of strategic transformation, we will consider combining the operating situation of the company after this stock market plan and its predictability.
Speaker Change: to study the long-term return mechanism, such as the long-term stock market policy, in order to achieve sustainable development of shared value with shareholders.
Speaker Change: Huya currently has sufficient internal funds. As of the end of December 2024, the company held cash, cash equivalents and deposits totaling over 900 million US dollars with no debt.
Speaker Change: For the full year of 2024, our non-GAAP net profit increased significantly compared to 2023, reaching RMB 270 million, and we achieved positive operating cash flow for the year.
Speaker Change: Even without considering future business cash flows, after completing the full dividend payment under this three-year dividend plan, Huya will still retain approximately 500 million U.S. dollars in funds.
ensuring sufficient financial support for future business development.
Speaker Change: given that Huya is currently in a special phase of strategic transformation.
Speaker Change: We will consider, after this dividend plan, studying long-term return mechanisms such as a regular dividend policy based on the company's operating condition and visibility so as to achieve sustainable development and shared value with our shareholders.
and Hanyu Liu, Lei Peng, Hanyu Liu, Junhong Huang.
Speaker Change: In terms of repurchase, under the current $100 million repurchase plan, by the end of December, we have repurchased 6,360,000 U.S. dollars worth of Huya stocks.
Speaker Change: The plan has been extended until March 31, 2026 We will consider the multiple factors, including market conditions, stock liquidity, and overall shareholder return, to promote the re-purchase.
and Hanyu Liu. Thank you.
In terms of share repurchases...
Speaker Change: Under the existing share repurchase program of up to 100 million U.S. dollars, we had repurchased Tuya shares with a total aggregate consideration of 63.6 million U.S. dollars as of the end of December last year.
The repurchase program had been extended until March 31, 2026.
Speaker Change: We will comprehensively consider various factors, including market conditions, stock liquidity, and overall shareholder returns, to prudently advance the repurchase program.
and Hanyu Liu.
Thank you. Thank you. Thank you.
Thank you.
Speaker Change: And our next question comes from Nelson Chong from Sydney. Nelson, please go ahead.
stay tuned to XboxLive!
nelson chong: Hello, thank you for accepting my question. My question is about other income. Based on the growth in the last 24 years, how do we see the other income in the next 25 years, especially the business development and growth momentum related to games?
Speaker Change: So, let me translate the question in English myself. Thanks, management, for taking my question. My question is related to the auto-revenue business growth. Under the robust growth in 2024, can management share your expectation into the auto-revenue, especially the game-related services, the business development, and also the growth driver going forward? Thank you.
Speaker Change: Thank you for your question, Nilsen. Let me answer this question. In the fourth quarter, although our game-related services, ads, and other income have decreased compared to the peak of the gaming industry in the summer, we can still see that the growth has almost doubled.
Speaker Change: to 3.72 billion yuan. The overall performance is still very stable. Specifically, in terms of game distribution, we continue to optimize the operation of Huya platform in the new and old games. Huya has become the main distribution channel for some games.
Speaker Change: After the launch of the new game, we are actively promoting live streaming and related promotion activities on the platform. The game also achieved a rapid growth through the distribution channel of Huya.
Speaker Change: and promote a positive cycle with game live content. At the same time, we are also expanding the field business of game release with more manufacturers. And in the fourth quarter, we started a more meaningful cooperative attempt with third-party game manufacturers.
Speaker Change: In the fourth quarter, although our revenues from game-related services, advertising, and others declined sequentially compared to the peak summer season, they still nearly doubled year over year, reaching an RMB 372 million.
demonstrating a very solid overall performance.
Speaker Change: Especially, in game distribution, we continue to enhance the operational excellence for both new and existing game titles on Huya platform. And we have become one of the primary distribution channels for several games.
Speaker Change: Following the launch of the new game Delta Force, we actively encouraged
Speaker Change: platform broadcasters to participate in live streaming and related promotional activities, leading to a rapid growth in the GAMS growth received through the Huya distribution channel, and fostering a positive life cycle with live streaming content.
Speaker Change: At the same time, we are expanding distribution and joint operations with more game developers and conducted meaningful trial collaborations with third-party game studios in the fourth quarter of 2024.
Speaker Change: In terms of product sales, we also continue to enrich the product sales category of the product to improve the efficiency of our traffic And further optimized the APP end, we are in the mall section
on the integration of popular props and user-based activities.
Speaker Change: In terms of advertising, we are also actively improving the ability of our self-made e-sports events to attract business.
Especially the legendary S2 of the League of Legends.
Speaker Change: We can also see that the IP value has been significantly improved.
Speaker Change: Compared to the first S1, the income of conglomerates has doubled and has attracted the support of more widespread well-known sponsors such as beverage companies, car companies and local living platforms.
Speaker Change: In terms of in-game item sales, we continue to diversify the categories of in-game items, improving traffic efficiency.
particularly the IP value of LOL Legend Cup S2.
Speaker Change: which doubled its sponsorship revenue compared with the first season of the scam and attracted a broader range of well-known sponsors. They're from beverage, automotive, and local live platform sectors.
and Hanyu Liu.
Speaker Change: In addition to the seasonal fluctuation of the industry in terms of game service performance, it is also closely related to the degree of participation of broadcasters.
Speaker Change: During the Spring Festival, I tend to forget about the gaming industry However, during the same period of time, the broadcasting rate of the broadcasters is also decreasing This may also have a certain impact on the business In addition, in 2024, we also successfully participated in the distribution and promotion of some large new games
Speaker Change: The pace of game product launch and the market performance are expected to have an impact on the company's revenue growth.
Speaker Change: It is worth noting that the performance of our game-related services business is not only constrained by the seasonality of the game industry, but also closely related to the participation of the streamers.
Speaker Change: Therefore, even though the spring festival period is typically a peak season for game industry, the decline in streamer live streaming rates during this period may have a certain impact on our business.
Speaker Change: Additionally, in 2024, we successfully participated in the distribution and promotion of several major new game launches.
Speaker Change: and the release schedule and blanket performance of future GAN products are expected to influence the growth of companies' related business revenue.
Thanks for watching!
Thanks for watching!
Speaker Change: Looking back at the past year, Huya has made significant progress in terms of commercialization and transformation. The annual non-live broadcast business revenue has exceeded 20% of the total revenue.
Speaker Change: In 2025, we will continue to promote commercialization and strive to further improve the revenue of game-related services and advertising. In addition to the current business progress, we also plan to strengthen cooperation with various game manufacturers and platforms and try a game-independent model to bring more possibilities to the continued development of the business.
Thank you. Bye. Bye.
Speaker Change: Looking back over the past year, Huya has made a significant progress in its commercialization transformation, with non-live streaming business revenue accounted for over 20% of the total revenue for the full year.
Speaker Change: In 2025, we will continue to advance our commercialization transformation, focusing on further increasing the game-related services and advertising revenues.
Speaker Change: In addition to refining our existing business, we also plan to strengthen the cooperation with various GAM developers and platforms and explore the exclusive distribution model to bring more possibilities for the sustainable development of our business.
Richie Sun: Thank you. And our next question comes from Richie Sun from HSBC. Richie, please go ahead.
Speaker Change: invite you to tea as a modern guide through African history and customs. If you are Brazilians and would like to teach in 에슈아시아어, I would definitely recommend that you visit this club.
Speaker Change: Vincent, Raymond and Hanyu, good evening. Thank you for accepting my question. I would like to ask about DeepSea's recent popularity. I would like to ask about the technology or AI for our products.
Speaker Change: and the company's applications, monetization, and cost structure, what impact will these things have?
Speaker Change: Thank you management for taking my questions. We noticed the rise of deepseed and also in AI in general recently and how does it impact our products, monetization strategy, cost structure, all these aspects. Thank you
Speaker Change: OK, thank you Rich for your question. I will continue to answer this question.
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Speaker Change: First of all, Huya is a technology-driven entertainment platform. At present, we are also actively integrating and applying solutions for various AI models.
Speaker Change: to make full use of the platform's technical support to enrich the game's live content and data.
Speaker Change: We also hope that Huya can create a long-term value in the field of live broadcasting and e-sports and bring an opportunity for income and profit growth in the future.
Speaker Change: Huya is a technology-driven entertainment platform and we are actively integrating and applying various AI large model solutions.
leveraging the platform's technical resources.
Speaker Change: reach game live-streaming content and data with the aim of creating a long-term value for Huya in live-streaming, esports, and other areas and bring opportunities for future revenue and profit growth.
Speaker Change: In February this year, Huya Live app also introduced DeepSig R1 full-blood model.
Speaker Change: and AI Assistants to help users search for popular sites, topics, and fun live broadcasts more efficiently. Next, we will also use the Assistants to support more functions such as game strategies and live broadcast interaction.
Speaker Change: In February this year, Ouyang LifeApp integrated the DeepSeek R1 large model full version and launched the AAI Assistant to help the users efficiently search for popular events.
Speaker Change: topics, and fun live streaming rooms on the platform. Moving forward, this assistant will also support features such as game guides and real-time interaction during live game streaming.
Thank you for watching!
Lei Peng, Junhong Huang, Hanyu Liu, Junhong Huang
Speaker Change: We will also build a series of AI-based streamers based on the style of the live broadcast.
Speaker Change: In terms of the commentary of the match, the replay of the match, as well as the match analysis of the BPs, we can provide users with a more differentiated live gaming experience.
Speaker Change: In addition, we have also made some progress in the implementation, reasoning, and output of virtual broadcasters, and we are continuing to optimize them.
Speaker Change: At the same time, we continue to explore the potential of AIGC in enhancing live streaming content and user services.
Speaker Change: to help them plan live streaming scripts, achieve data-driven operational support, and respond to viewer interaction needs in real time, and also create a more interactive user experience.
Speaker Change: On the other hand, leveraging the reasoning and multi-modal capabilities of AI large models and through deep integration with the unique commentary styles of our platform's streamers.
We will build a series of
Speaker Change: of more stylized AI-powered virtual streamers in the construction of live streaming event content.
Speaker Change: and provide the users with more differentiated gaming experiences in areas such as event commentary, event replays, and band-pick phase match analysis.
Speaker Change: According to current early testing data, the application of the streamer assistant has significantly increased the activity of live streaming viewers and the gift revenue from the viewer interactions.
Speaker Change: Additionally, we have made progress in the creation of virtual streamer style and real-time reasoning output of large models, and we will continue to optimize on these areas.
Speaker Change: In the future, Huya will also implement the strategy of deepening AI and live streaming.
通过AI大模型来赋能主播的效能的升级
Speaker Change: to create a new model of AI IP and to bring a new experience to the users and content creators based on the stylized virtual broadcasters.
and Hanyu Liu. Thank you. Thank you.
Speaker Change: In summary, looking into the future, Hulia will deepen the implementation of AI plus live streaming strategy.
Speaker Change: and empower our broadcasters with AI-enlarged models to upgrade their efficiency, to create new AI-IP models and more stylized virtual streamers.
bringing a completely new experience to users and content creators.
Speaker Change: Huya will leverage AI large models throughout the content production, distribution, and consumption loop.
Speaker Change: using intelligent tools to activate the live-streaming creator ecosystem and propel the live-streaming industry from a human-driven to a technology-driven future.
Thank you for watching!
Speaker Change: Thank you. Now we will take our last question today from Yiwen Zhang from China Renaissance. Yiwen, please go ahead.
Yiwen Zhang: Okay, thank you for accepting my question, Mr. Guan. I'd like to ask about the trend of our live stream income. And I'd also like to ask what the company thinks about the overall profit margin trend. Thank you.
Yiwen Zhang: So thanks for taking my questions. So can you discuss our live streaming revenue trend and additional rates? Can you also touch upon our group overall profitability margin trend as well? Thank you.
Mr. Guan: Thank you, Yiwen. In the fourth quarter, our live income continues to be affected by the macroeconomic and industrial environment. Users' desire to spend has been restored. At the same time, we continue to adopt a more cautious operating strategy. The overall live income is still weak.
Mr. Guan: In the fourth quarter, our live streaming revenue continued to be impacted by the macroeconomic and industry environment with users' willingness to spend on gifting yet to recover.
Mr. Guan: At the same time, we maintain a cautious operational strategy, resulting in overall live streaming revenue remaining weak.
Speaker Change: 通常,第一季度是直播行業的淡季,春節假期及其前後。 Usually, the first quarter is the off-season of the live broadcast industry, and the holiday of the Spring Festival is just around the corner.
Mr. Guan: The number of live broadcasts has decreased. In addition, the number of related activities and competitions in this quarter has decreased. We expect that the live streaming revenue level in the first quarter of this year will still be a seasonal decline in the fourth quarter of this year. We noticed that after the Spring Festival holiday, the live broadcast situation has gradually recovered.
Mr. Guan: Typically, the first quarter of a year is low season for the live streaming industry.
Mr. Guan: During the Spring Festival holiday and its surrounding period, the number of broadcasters going live decreases.
Mr. Guan: and with fewer related activities and events in this quarter. We expect live streaming revenue in this first quarter of this year to seasonally decline compared to the fourth quarter last year.
Mr. Guan: And we have noticed that some streamers' live streaming activity has gradually recovered after the Spring Festival period.
Regarding the profit...
Mr. Guan: At the cost end, the fourth quarter, due to more large-scale board games and self-contained e-sports events
The content cost has increased in the third quarter.
Mr. Guan: But compared to the same period last year, due to the effective saving of copyrighted e-sports tournament authorization fees, including the Hero League S Tournament, as well as the optimized anchor cost structure, the content cost has been significantly reduced. Therefore, the 4th quarter net profit reached 11.4%.
烈低于第三季度,小二零一四年中的冠军, 这次的冠军是中国的军队, 而中国在军队的这个年龄层中, 都是一种军队。 而中国在军队的年龄层中, 也是一种军队。 中国的军队在军队的年龄层中, 也是一种军队。 中国的军队在军队的年龄层中,
Speaker Change: In the fourth quarter of 2023, the share price increased by 10.4%. In terms of operating expenses, the company continues to maintain a cautious spending strategy and effectively supports the overall operating performance of the fourth quarter. The Langevin profit is slightly lower than the same period last year.
However, compared to the same period last year,
Speaker Change: content costs have significantly declined due to the effective savings in licensing fees for licensed eSports events, including LOL Worlds 2024, as well as a more optimized
Speaker Change: streamer cost structure. So as a result, the gross margin in the fourth quarter reached 11.4 percent, slightly lower than the third quarter but up by 10.4 percent compared to the fourth quarter of 2023.
Speaker Change: And in terms of operating expenses, the company continued to maintain a cautious spending strategy, effectively supporting the year-over-year improvement and overall operating performance in the fourth quarter, with a non-gap net income turning profitable compared to the same period of last year.
and Hanyu Liu. Thank you. Thank you.
Speaker Change: Our subsequent profit situation will be affected by the overall income scale change.
而在成本费用端,除了适度加大对自制内容的投入外,而在成本费用端,除了适度加大对自制内容的投入外,
由于我们积极的股东回报政策,将导致账面现金盈余降低,叠加市场利率下降等因素,由于我们积极的股东回报政策,将导致账面现金盈余降低,叠加市场利率下降等因素, 我们预计今年利息收入将显著低于2024年,因此今年的利润表现将主要依赖于公司在运营利润方面的改善情况。 我们预计今年利息收入将显著低于2024年,因此今年的利润表现将主要依赖于公司在运营利润方面的改善情况。
Speaker Change: Our future profitability will be influenced by the changes in overall revenue scale, while on the cost and expenses side, in addition to moderately increasing investment in self-produced
Speaker Change: content, we expect there's still a room for improvement in licensed content costs and streamer cost structures in the future. And we will continue to strictly control operating expenses.
Speaker Change: notably due to our proactive shareholder return policy leading to a reduction in cash surplus on the book.
coupled with factors such as declining market interest rates.
Speaker Change: We expect the interest income this year to be significantly lower than in 2024.
Speaker Change: Therefore, this year's bottom line performance will primarily depend on the improvement in the company's operating results.
Li Junhong, Lei Peng, Hanyu Liu, Junhong Huang
Thank you.
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Speaker Change: Try hard! Senior! There's still a chance! Keep up the good work, Factory President! Please don't cry. Try your best as you did yesterday... Junhong is our partner! Our coach will protect you, until you meet your dream! Thank you so much! No problem!